Are we being monitored when we work remotely?

Time ago when I was working in my previous company I found out that an employee complained because her boss told her that she was slacking off, because there was a sort of keylogger installed on her computer and according to that spyware, she was being inactive.

I was seriously worried about, and I don't even think it's legal to monitor employees like that. According to a survey, 96% of the employers use some kind of software to monitor us (too bad that my level isn't high enough to post the link, if you ask me in private I will send it to you!)

I don't know what to believe I don't even think it's legal. Does anybody who maybe works in a company ICT department have some details? Like for example if anybody is aware of companies monitoring active time to make sure that we all work 8 hours?

Are we being monitored when we work remotely?
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